New exploration permits awarded

Shell has acquired another exploration block in the Great
South Basin, which will likely push the cost of its
hydrographic seismic survey work in recent years beyond $100
million.

South Canterbury Basin explorer Anadarko, which hopes to test
drill off Oamaru, has secured two permits in the Pegasus
Basin, southeast of Cook Strait.

Shell, and partners OMV and Mitsui, have spent about $80
million in 2-D and 3-D seismic surveying in the Great South
Basin, and have taken up another permit and committed to a
new 2000km 2-D seismic survey, with contingencies to later
decide on 1250sq km of 3-D seismic surveying and an
exploration well.

Shell expects to make a decision within 12 months on drilling
in the Great South Basin.

Shell New Zealand chairman Rob Jager said the new permit
offered Shell a larger explorable area ''and therefore a
greater upside in case of [exploration] success''.

Government permit agency New Zealand Petroleum and Minerals
yesterday released the names of the successful applicants for
the 2012 onshore and offshore block offer.

Seven permits were awarded in the Taranaki Basin, two in the
Pegasus Basin and one in the Great South Basin.

Green Party energy spokesperson Gareth Hughes accused the
Government of ''gambling'' with the environment and economy,
in awarding further blocks to Anadarko.

Anadarko New Zealand, a wholly owned subsidiary of Anadarko
Petroleum Corp, had a 25% stake in the Deepwater Horizon
disaster in the Gulf of Mexico in 2010.

''It's outrageous that the Government awarded deep sea oil
drilling permits to the very company that was partially
responsible for the catastrophic Gulf of Mexico oil spill,''
Mr Hughes said.

There were 24 qualifying bids for 13 of the blocks tendered,
particularly around the Taranaki region, bids coming from the
Netherlands, Austria, Canada, the US, Australia and Japan and
domestic companies, Minister of Energy and Resources Phil
Heatley said in a statement.

''This is essential if we are to realise the potential of our
petroleum resources for the benefit of the whole country,''
he said.

Collectively, the permits represent committed work programme
expenditure of $82 million which, if successful, could lead
to a further $776 million of spending within five years.

''It's pleasing to see ongoing development of portfolios by
established operators including big players such as Shell,
OMV and Anadarko,'' Mr Heatley said.

Petroleum Exploration and Production Association chief
executive David Robinson said the block offer had been a
success, with more than $700 million dollars to be invested
in New Zealand during the next five years.

OMV New Zealand has announced the commitment of the
semisubmersible drill rig Kan Tan IV for a 90-day drilling
programme offshore at Taranaki, expected to begin by the
third quarter next year.